Supported by the morning's higher-than-expected data on business activity in the United Kingdom, as well as November's lending statistics (consumer credit increased by £2.005 billion instead of the forecasted £1.4 billion), the pound was able to strengthen at the start of today's European trading session. Furthermore, amid the moderate weakening of the dollar during the Asian trading session, the GBP/USD pair managed to rise to an intraday high of 1.2730.

However, this was not enough for GBP/USD to return to the zone of a long-term bull market, above key resistance levels of 1.2735 (200 EMA on the weekly chart) and 1.2770 (50 EMA on the monthly chart). Subsequently, GBP/USD again began to decline: investors are hesitant to build up long positions in the pair ahead of the publication of the ADP report (at 13:15 GMT) and data on the number of unemployment benefit claims in the USA (at 13:30).

If the macro data from the USA turns out to be strong, then breaking through the important short-term support level of 1.2691 (200 EMA on the 1-hour chart) may signal the resumption of short positions in the pair. A break of the local support level of 1.2610 and the important short-term support level of 1.2607 (200 EMA on the 4-hour chart) will, in this case, be a confirming signal of sellers' intentions to return the pair to the zone of a medium-term bear market. A break of key support levels at 1.2490 (144 EMA on the daily chart), 1.2465 (200 EMA on the daily chart) will signal GBP/USD's transition into this zone.

If negative dynamics prevail again, GBP/USD will head deeper into the downward channel on the weekly chart, whose lower boundary passes near local support levels of 1.1920, 1.1800.

In an alternative scenario, if the price overcomes the zone of key resistance levels at 1.2735, 1.2770, it will head towards the 2023 high reached in December at 1.2827, with the prospect of further growth. This, in turn, will mean GBP/USD's entry into the zone of a long-term bull market, making long-term long positions relevant.

In other words, GBP/USD is currently in the zone of crucial marks (1.2600, 1.2735, 1.2770), and a break in either direction will have an almost 'fateful' significance for the pair.

At this moment, the dynamics of GBP/USD are largely determined by the dynamics of the dollar.

Support levels: 1.2691, 1.2610, 1.2607, 1.2600, 1.2565, 1.2520, 1.2500, 1.2490, 1.2465, 1.2400

Resistance levels: 1.2700, 1.2735, 1.2770, 1.2800, 1.2827, 1.2900, 1.2995, 1.3100, 1.3140, 1.3200

Trading Scenarios

Alternative scenario: Buy Stop 1.2745. Stop-Loss 1.2675. Targets 1.2700, 1.2735, 1.2770, 1.2800, 1.2827, 1.2900, 1.2995, 1.3100, 1.3140, 1.3200

Main scenario: Sell Stop 1.2675. Stop-Loss 1.2745. Targets 1.2610, 1.2607, 1.2600, 1.2565, 1.2520, 1.2500, 1.2490, 1.2465, 1.2400

'Targets' correspond to support/resistance levels. This does not necessarily mean that they will be reached, but can serve as a guide when planning and placing your trading positions.